THE BREAKFAST BRIEFING

Lost in the emerging-market turmoil and the jittery U.S. stock markets is the fact that a fresh battle over the debt ceiling is brewing in the nation’s capital.

Washington has not been a front-and-center issue for investors since last year’s government shutdown was resolved. But with the government expected to bump up against the borrowing limit on Friday, opinions are split on how this will play out and what the economic and market consequences will be.

The federal government is expected to use extraordinary measures to continue borrowing if and when it hits the debt limit, measures that will likely be exhausted in late February. That would give lawmakers less time and flexibility to negotiate than in earlier fights, a potentially worrisome development Secretary Jacob Lew warned about earlier this week.

Each of these fiscal fights since the debt-ceiling battle in the summer of 2011 has drawn less and less attention on Wall Street, to the point where most investors ignore chatter about the latest tensions. That’s what makes at least some people nervous.

“The market is far too complacent on this topic,” Chris Krueger, a senior political analyst at Guggenheim Partners’ Washington Research Group, wrote to clients earlier this week.

Moody’s Investors Service said that the resumption of the U.S. debt limit on Feb. 7 “does not currently affect the U.S. government’s AAA rating and stable outlook.” The ratings firm expects the debt ceiling will be raised.

Meanwhile, Fitch – which has the U.S. on “rating watch negative” – is more concerned about the situation. The debt-ceiling fight will be a “key driver for resolving” the negative watch it has placed on the U.S. credit rating, the firm said.

The S&P 500 is down 6.9% this year amid worries about the emerging markets, the Federal Reserve and earnings. The market’s positive momentum from last year has vanished, and many investors are expecting the rocky road to continue ahead of Friday’s jobs report and beyond.

As if there wasn’t enough to worry about already, investors might soon add another fiscal showdown to the list.

Morning MoneyBeat Daily Factoid: On this day in 1945, the king of reggae, Bob Marley, was born in Jamaica.

STOCKS TO WATCH

Among the companies whose shares are expected to see active trade in Thursday’s session are Twitter Inc., Walt Disney Co. and Pandora Media Inc.

After Wednesday’s closing bell, Twitter reported its fourth-quarter loss widened to $511.47 million, or $1.41 a share, from a loss of $8.71 million, or 7 cents a share, in the year earlier period. Revenue rose to $242.68 million from $112.28 million. Adjusted profit was 2 cents a share. However, shares of Twitter fell almost 12% in after-hours trading as the microblogging company reported weaker-than-expected user growth.

Walt Disney said late Wednesday its first-quarter profit rose to $1.84 billion, or $1.03 a share, from $1.38 billion, or 77 cents a share, in the same period a year ago. Adjusted earnings came in at $1.04 a share, ahead of the 92-cent forecast by analysts. Disney shares rose 1.5% in extended trade.

Pandora Media late Wednesday reported it earned 6 cents a share on $137 million in revenue for the November and December “stub period” as the online radio company transitioned its fiscal year to match the calendar. For the calendar quarter that ended Dec. 31, Pandora earned 4 cents a share on sales of $200.4 million. Excluding one-time items, Pandora would have earned 11 cents a share, above the 8 cents a share forecast by analysts. Shares of Pandora fell 7.3% in after hours.

MUST READS (LINKS)

Stock-Market Listings Stage a Comeback: “The ranks of U.S. public companies grew last year for the first time since the Internet boom, getting a long-awaited boost from an expanding economy and renewed investor interest in U.S. stocks.”

Twitter Revenue Jumps, But Concerns Rise: “Twitter’s fourth-quarter revenue surged, but so did concerns about the site’s ability to grow and engage users. Costs continued to rise faster than revenue, and shares fell after hours.”

Regulators Again May Clip Volcker: “Federal Reserve governor Daniel Tarullo said regulators are weighing whether to loosen provisions that could affect a $300 billion market for loans to U.S. companies.”

CVS Says It Will Stop Selling Cigarettes: “CVS said it would stop selling all cigarettes and tobacco products, saying they have no place in a drugstore company that is trying to become more of a health provider.”

Credit Suisse Profit Misses Forecasts: “Credit Suisse made almost no profit growth in the fourth quarter as Switzerland’s second-biggest bank seeks to restructure and zero in on extremely wealthy clients.”

N.Y. Regulator Joins Forex Probes: “A New York state banking regulator has requested documents from more than a dozen banks over their foreign-exchange trading practices, said a person familiar with the matter.”

Top Forex Ranks Thin Amid Probes: “A wave of resignations, firings and suspensions this week, including some of the most senior executives in the sector, comes amid falling foreign-exchange trading activity and global investigations into possible manipulation of currency markets.”

U.S. to Curb Drone Use In Pakistan: “The Obama administration will narrow its controversial drone program in Pakistan to target a short list of high-level terrorists, and aim to end it during the prime minister’s current term, senior U.S. officials have told their Pakistani counterparts.”

Sony Slashes Outlook: “Sony expects a net loss for the fiscal year and will sell its personal-computer unit to fight losses at its core electronics businesses.”

The ECB Divides Expert Opinion: “Not to over-hype it or anything, but Thursday’s ECB meeting is certainly at the more exciting end of the scale. Analysts and investors can’t agree on whether the central bank will cut rates, setting the scene for the market to react to any outcome. Drab inflation makes the case for a cut. But factories in the euro zone are humming.” (MoneyBeat – join our live blog of the latest policy action from 7.20 a.m. EST)